The Hong Kong Jockey Club is little known outside Hong Kong, yet through its philanthropic arm, the Hong Kong Jockey Club Charities Trust, its annual philanthropic expenditure puts it among the world’s top ten institutional donors.
Leong Cheung served as the Executive Director of the Hong Kong Jockey Club Charities Trust from 2014-2022
Leong Cheung has just stepped down after eight years as the head of the Charities Trust to take a sabbatical in Oxford. Alliance spoke to him about how this singular institution works, about the significant change it has undergone during his tenure, about the often neglected traditions of Asian philanthropy and about the next steps.
AM: Has the Jockey Club always had a social mission?
LC: The Hong Kong Jockey Club was set up almost 140 years ago in the 1880s. It’s not a commercial entity, it was set up as a not-for-profit organisation. It has the only legal licence to operate horse racing and the wagering side of horse racing in Hong Kong so as you can imagine, it is a very profitable venture. It’s also the single largest taxpayer in Hong Kong. I think we pay close to seven per cent of the total Hong Kong inland revenue, which comes to about USD3 billion a year. The Club has four major business units: the horse racing part, which deals with all the horse ownerships, the trainers, the stables, import of the horses, feeding, etc. The second part is wagering of which we operate three types. One is horse racing, one is football betting and the third is the lottery, which is similar to UK’s Big Lottery fund. We only manage the operation. The money goes to a government department, We also have a membership business unit of about 23,000 members who are mostly the movers and shakers in Hong Kong. The fourth business unit which I managed in the last eight years is the charities trust, which is like a foundation. A quick example of how the economics works is that if you come to a racecourse, or if you bet, say £100 online, roughly £82 out of the hundred goes to prize money for the winners. Out of the remaining £18, seventy-five per cent – £14 – goes to the government as betting duty, which is the highest in the world, and we are left with £4, which covers all of our costs and then we still have profit. In the last eight years, in general over 90 per cent of that profit goes from the club to the charities trust, which we donate to the community. So the scale is big. If I take away the one-time donations, of which we have a couple of very large size, it comes to about USD550 million a year. It’s a lot of money and it puts us in the top ten institutional donors globally.
Nobody talks about Asian philanthropy outside Asia.
I took the job in 2014. In the previous five years, our average donation was only about 2 billion Hong Kong dollars. Now, we’re at 4.5 billion. So in the last eight years, we have doubled the previous level of donation. Also in the previous years, 80 per cent of our donations went to capital projects – parks, swimming pools, buildings, universities, etc. It was also focused on fewer grantees – call it 150-200 grantees – so we basically worked with just long-relationship partners.
How do those relationships work? Do they approach you? Or do you put out calls for proposals?
It was mostly passive. We waited for proposals to come in but, since 2014, we have changed completely. We started to introduce investment themes, rather than waiting for people to come to us with proposals. We asked ourselves what Hong Kong society needed in the next 10 years or even longer. We really wanted to think through and say what is government, civil society and business doing and how can we play a unique role where on some issues, we can push the civil society sector to think innovatively and fill some of the gaps that government may not be able to fill. So in contemporary terms, we started impact-driven thinking. When I joined the team, it was less than 30 people and mostly on the administrative side because that was the process up to that point. We started to define social issues and then, out of that, three or four focuses, with different strategies for each emerged. For example, ageing. Your physical functionality peaks at a certain point and there is a line across the curve that’s the threshold of independence and when you fall under it, you can’t take care of yourself, you need outside help. Some people reach that line at the age of 55, and they need 30 years of caring. Some people hit the line the day before they die. So we looked at government spending and most of it went to people who cannot take care of themselves, which is fine. But we also found newer research that if adults can maintain their peak longer, meaning you live a healthier life, you think ahead a little bit more, you tend to fall under that line later. So we thought trying to extend the years of independent living was a better position for foundations, and over the last eight years, we have made ageing one of our focus areas and allocated 80 per cent of our spending in the area to prevention and only 20 per cent to caring, which is on two very specific programmes. One is end-of-life care. There’s an index called the quality of death index by The Economist. Hong Kong ranked twenty-second in 2015 out of around 80 countries and cities. So we started to look into fundamentally changing how end-of-life care is delivered in Hong Kong and working with many partners including the government and, in the last index Hong Kong ranks ninth in the world.
So you’re being more intentional about how and when you intervene?
That’s right.
I presume that also has implications for your staffing in terms of research and so on.
Yes. It’s very different now. First, the team has grown to 160 people, and we also started to engage consultants to help us define the theory of change much earlier. We have also professionalised the team. I have a finance background and we think of ourselves almost like a private equity firm. We have the grantmaking team who are the experts and have strong relationships with the different sectors they work with and they know how the sector works. They are the key managers if you will. And then we tie those things in with social issues and challenges. For example, arts and culture or sports aren’t just activities in themselves. If you deploy them right, it helps reduce stress and supports mental wellness. But how do you get a sports association to think about a social issue? In Hong Kong, they don’t. It requires a different kind of thinking to get them from promoting elite sports to more community-based sports which produce health benefits.
Obviously, you work in partnership with different organisations on these projects. Do see yourself as having a catalytic role?
We do. I think we feel very proud in the last eight years of bringing about significant changes in the sector. One is, as you said, the catalyst for collaboration and innovation. NGOs are often subject to the tyranny of funding and it’s sometimes even more difficult for civil society to work together than the business community: ‘I have this idea, I have my own set of funders, I don’t want to share with you.’ So, many times, you see people reinventing the wheel because data and knowledge are not commonly available. So being a strategic funder is a critical role for us. I’ll give you one example, autism. Hong Kong has a similar education system to the UK, so autistic kids go through normal schools unless they’re far along the spectrum. That’s where the system fails because normal teachers are not well trained in how to deal with autistic kids, so it’s a matter of luck whether you get a good or a not-so-good teacher. Let’s say I’m autistic, One year, I run into someone who really understands me, a very good teacher. Next year, I get a different one who has no idea who I am or what I need. There’s no data, no follow-up. So we ran a programme six, seven years ago called Autism Connect and we had a study done which came up with a framework on six dimensions for helping support the kids and we set up a platform whereby we supported six NGOs to work together instead of working separately. To be honest, initially, not everyone was on board. People were saying, ‘we like the idea, but you can just give us the money and we could do it for you?’
I was going to ask you how it was seen when you reinvented yourself as a strategic funder. Was there some resistance from your grantees and the rest of the sector?
Of course. We did it in a couple of ways. One was that we hired consultants to help us come to a structural understanding of a particular issue, which is not common. Very seldom do those working in an area have an overall view of it. To take the example of ageing, again, in 2014 we did a segmentation on people 65 years or above. At that time in Hong Kong, only about 15 per cent of the people aged 65 or above had more than a high school diploma, so they were seen as vulnerable and in need of support but if you extrapolate to five and ten years, that 15 per cent becomes 40 per cent and the picture looks very different, Following this analysis, we organised a one-day workshop for about 40-50 sector practitioners including from government and at the end, we gave every table an envelope, with HKD500 million in it and asked what they would spend it on. So, we came out with 70 or 80 different ideas, which was our long list. That’s the way we listen to the sector so they feel valued and they feel like strategy is not just dictated by us.
We started to look into fundamentally changing how end-of-life care is delivered in Hong Kong and working with many partners including the government and, in the last index Hong Kong ranks ninth in the world.
The other thing is, like the project I just mentioned, A-Connect on autism, that we use the grantmaking and due diligence process to really convince the other side. Of course, when you bring money to a table, it’s much easier to convince, but through this process, we look to engage maybe six partners plus a university, to agree on a framework. To be honest, even if we don’t make the grant, it’s still a very progressive dialogue.
You’re a mainstay of Hong Kong society and of the state as well because you’re big taxpayers and you’ve got partnerships with them. Does that ever work against you? Hong Kong over the past few years has been very turbulent, there’s been a lot of criticism about heavy-handed repression. Does that make your relationships with the communities difficult because they see you to a certain extent as in a privileged position with regard to the state? And on the other side, are you constrained from funding certain sorts of projects?
No. We are not the government, so there’s no political agenda. We are not a business, so there’s no commercial interest. We’re not an NGO, so we don’t compete for resources, we bring resources to the table. So we can commit to being flexible capital for long-term impact. We are a neutral platform politically and we are trusted by all sides because as neutrals when we go out and say, ‘we need business partners on this particular project, do you want to join us?’ a lot of them are more than willing. And like I said, we also have a membership of 20,000 many of whom come from the business sector, so if we’re doing something that seems it will have a significant impact like the autism case, generally when we knock on the door, people listen. Nobody’s shutting the door on the Hong Kong Jockey Club.
As a hypothetical case, suppose a rights group in Hong Kong was looking for money, would they come to you, or would they think these guys are conservative, they won’t fund rights issues?
That’s very clear. We operate in quite a different way from, say, the Ford Foundations of the world. We don’t do advocacy work. Generally, we are more service-oriented. However, that’s not absolute. For example, we ran the A-Connect project for six years and served about 70 per cent of the autistic kids in Hong Kong. Through this programme, we basically developed a new curriculum for Hong Kong schools, and ultimately, the education bureau took it over and it has become education policy. We have multiple projects similar to that, like the end-of-life care I mentioned, which the government practically committed to fund for another three years because of Covid, because it not only improved quality of life, it also saved public money which we could demonstrate clearly from the evidence. Now would you call that advocacy? I would say yes, not the rights-based campaigning kind, but by evidence, by pilots.
You started off in finance and commerce, what drew you to the social sector?
I started off as a management consultant and also had my own internet start-up. But my last job before I took on the Hong Kong Jockey Club was operating partner with a private equity firm in Hong Kong. It’s been a bit of a personal journey. I became a runner at a relatively late stage of my life and then I took on multiple marathons and even ultramarathons. That changed my own perspective on life, and how I want to spend my time. So after six-plus years with the private equity firm, I decided to quit to start up a social enterprise.
Run Our City?
Yes. We take young people who don’t run and don’t exercise and make them a promise that if they join our programme, in eight weeks’ time, they will be able to run 10km. For a lot of people, that’s very challenging, but Run Our City started in 2013, we have already trained 12,000 students to do this and we see a huge change in them. We suggest they break down the 10km goal in eight weeks, to smaller goals and, when they’ve done it, we say, maybe you can translate this kind of thinking into passing your next English exam, your relationship with your parents, etc. The reason why we call it a social enterprise is that, while we don’t charge money, we pay our coaches because the coach-student relationship is an important one and it needs commitment. To pay them, we organise running races in Hong Kong, which brings in commercial sponsorship and then you have entry tickets. So I quit private equity to do Run Our City, then the Jockey Club called.
You’re behind the Philanthropy for Better Cities initiative. What’s the story there?
When I started this job, I spent the first year going to conferences to educate myself and I realised that not only is the Hong Kong Jockey Club completely unknown outside Hong Kong, but also globally at that time and to some extent today, a lot of conferences focus on developing countries’ issues, often rural issues, while we focus on city issues and metropolitan social issues are becoming more and more important, and more complicated. If you look at Asia in particular, more and more people are moving into towns and cities but not that many people are trying to address the social challenges that come with that. We think that Hong Kong is a good example. We have issues of ageing, housing and so on. That was one key motivation. The second thing is, as I attended these different conferences, I saw that there were very few Asian speakers. Generally, when it comes to philanthropy, it’s as if Asia doesn’t exist. People didn’t understand the tradition. I was talking to one well-known philanthropist and she suggested sharing American knowledge to promote the development of the sector in China. So I told her that 2,500 years ago, there was a Chinese man who got rich three times, and each time, he gave everything he had to the community. So I said Bill Gates is doing the Giving Pledge, this guy did it three times. So it’s my understanding from those few conversations that nobody talks about Asian philanthropy outside Asia.
Anyway, we want an Asian narrative, and we want a city narrative and therefore the Philanthropy for Better Cities Forum. In more contemporarily defined philanthropy, the East still has a lot to learn, but I would argue that it has its own cultural tradition. That also relates to what I’m doing now. I wanted to take a sabbatical to think through this narrative maybe about Asia generally, but at least on Hong Kong and China. The other more specific topic I started before I left the Jockey Club is to build an institute of philanthropy in Hong Kong. There are many options – you can be very academic, or more sector-focused, so I’m trying to think through some of these options and how we structure this, how we finance it if the Hong Kong Jockey Club goes ahead with something like that. It would definitely have a Hong Kong and Chinese perspective, but how can it also have a more international perspective? Are there any different alliances that they can build?
So, you’re not going back to your old job but will be working as a consultant for HKJC on this institute idea?
Yes, just on this.
In your experience of the world of philanthropy, what particularly strikes you about the way things are done differently in Asia and in the West?
I think Asian philanthropists, particularly in Hong Kong and China, have a very strong sense of community. They feel their wealth comes from the local community, which might be just Hong Kong or China, or all the countries or regions they operate in. It can be totally altruistic, or it can be seen as good for their reputation. My sense is that western philanthropists take the view that, ‘I’ve accumulated this wealth and therefore I have full freedom to deploy it anywhere I want.’ I think generally, Asian philanthropists would ask ‘if I were to deploy this money this way, would my community react quite negatively?’ I don’t have empirical data to prove anything but that’s my feeling.
I think we have encouraged funders and also the sector to go forward, partly because we’re big and if we move, then smaller funders are encouraged to move, too.
I also think that Asian philanthropists, particularly Chinese, are very afraid of getting their names known, so they will make a donation but don’t talk about it. At the Jockey Club, we are fine getting our names out. We’re an institution and we feel if you have good practice, or if you have bad practice, share it with the field so that people don’t make the same mistake. And we can’t do everything. We want others to participate, so we want to advertise. If you’re an individual philanthropist in Asia, there’s still the sense that if you’re doing something good, don’t boast, be humble.
That’s a cultural thing rather than a political thing.
Yes, it’s a cultural thing.
The Jockey Club has taken this more catalytic role. How important is it for the future of philanthropy in Hong Kong for someone like the Jockey Club that is a big presence to do that sort of advertising?
I think it’s very important. In the Philanthropy for Better Cities Forum meetings in 2016 and 2018, we set aside half a day for what we call Foundation Circle and we had very positive feedback from the sector saying ‘you are the biggest guy in town, and you are promoting collaboration and innovation, you are promoting digital transformation, that gives us a lot of confidence so that we can then go back to convince our board.’
Do you see things changing on the basis of your example?
I think so, particularly on collaboration. We’re seeing a lot more. In the last eight years, we initiated about 15-16 of these mega projects we call trust initiative projects and we’re starting to see other organisations coming together and coming to us. Digital transformation is also very interesting. Around seven years ago we started saying to the sector everything is going digital in the world – government, business – but the social sector is lagging behind so we said we want to support digital development. What’s interesting is that we now have organisations come to us, for example, a food bank, who in the past would probably apply for funding for a system to use themselves, now wants to develop a common app that other food bank providers can use as well. So they take the lead in managing this process, the testing, the pilot etc, but in the end, there is a common platform. And especially when it comes to digital transformation, the aggregate data is much more valuable than segmented data, because only with aggregated data can you start to analyse the kind of people who are taking food, the frequency of use, etc.
So, going to get back to your question. Yes, I think we have encouraged funders and also the sector to go forward, partly because we’re big and if we move, then smaller funders are encouraged to move, too.
You responded very quickly during the pandemic. What were the factors that enabled you to do that?
At first, people did not realise the seriousness, but then very quickly, in the first couple of weeks of February 2020, it turned into a panic situation – everything in the supermarkets gone, no masks and so on. By the third week of February, we had already convinced our board to put up HKD100 million[1] as an emergency relief fund and, within a week, we changed our approval process to be completely online. We are generally very slow or we tend to ask a lot of questions, but by the end, we had a process where, from the point of an organisation sending in a request on the digital platform, our money could be in their bank account in five days.
And we didn’t miss any part of the process, that’s the thing. All our internal and financial management evolved to design this superfast process.
Were you able to use your network of existing partners?
Absolutely, that was the fundamental thing in allowing us to move so fast. our trusted partners. They trusted us, we trusted them. That’s the only way you can mobilise so quickly. We’re talking about a fund of a hundred million, but each donation was HKD500,000 so we’re talking about hundreds of organisations, often doing very specific things. For example, some people with kidney problems needed to go to the hospital twice a week for treatment, but at the time of Covid, they didn’t have masks, the volunteers who used to come and take them couldn’t do that anymore, so it got to be very specific and very on-the-ground. And schools were closed so online classes very quickly started up, but students from poor families don’t have broadband so they started to use their parents’ phone SIM card. One session of Zoom, it’s all gone. So we lobbied the four mobile operators in Hong Kong who began offering their service at a little bit under cost and, by the end of March, we were offering 100,000 SIM cards to poor students. But it moved very, very fast. We completed all the commercial negotiations, talked to 700 schools who got the names of a hundred thousand students and we distributed the cards all within a four- or five-week window. We then lobbied the government and in September when school restarted, they took over the whole initiative. So our money during that very short time period accelerated the filling of the gap.
As you say, that was only possible because of trust.
Absolutely.
Andrew Milner is Features Editor at Alliance.
Footnotes
- ^ HKJC ultimately donated more than HK$2.3bn towards all Covid-related initiatives
Comments (1)
Thank you for enlightening people throughout your work as it speaks by itself..